Wood hails progress towards Amec deal

Amec Foster Wheeler has offered to sell a number of assets to allay concerns over its proposed £2.2 billion takeover by Aberdeen-based energy services giant Wood Group.

The Competition & Markets Authority (CMA) warned earlier this month that the deal could face an in-depth probe if the companies failed to address issues around the supply of engineering and construction services, as well as operation and maintenance services in the North Sea.

The CMA said yesterday that it was considering proposals that would see Amec sell off “almost all” the assets that contribute to these services in its upstream offshore oil and gas business in the UK.

The watchdog added that there were “reasonable grounds” for believing these undertakings might be acceptable and it will open a public consultation on the proposal.

Wood chief executive Robin Watson hailed the announcement as an “important milestone” towards securing the takeover, adding that it gave the firm “further confidence in our ability to complete the transaction in quarter four this year”.

When announcing the deal in March, Wood said it would result in “significant cost and revenue synergies” of at least £110 million a year. The group employs 29,000 people, while Amec has 35,000 workers, and the new entity would be valued at about £5bn.

The CMA said it was “crucial that competition is maintained in this major UK industry”. It is due to issue its final decision by 12 October, but this deadline could be extended until 7 December. 0 Robin Watson, chief executive of Wood Group